Australia is entering a pivotal phase in its financial history: the largest intergenerational wealth transition ever recorded. An estimated $3.5 trillion is expected to change hands over the next two decades, yet most families won’t retain it. In fact, 70% lose their inherited wealth by the second generation, and 90% by the third. Only a tiny fraction, just 1 in 20 families, manage to pass on more wealth than they received.¹
For executives, senior managers and professionals, many of whom have built substantial wealth through decades of hard work and strategic investment, this looming transfer presents both a challenge and an opportunity. The question is: how do you make it a success?
The Global Picture: A Mega-Shift in Motion
Australia isn’t alone in facing this challenge. Globally, $18 trillion is expected to transfer between generations by 2030. In the United States, heirs will inherit approximately $124 trillion by 2048. Yet the “rags-to-rags in three generations” pattern continues to play out.¹
Most wealth in Australia is transferred late in life, often after the death of the wealth holder. This delay can limit the effectiveness of wealth planning and reduce opportunities for the next generation to benefit from financial mentorship and structured guidance.
At Executive Strategies, we’ve been working closely with clients to navigate this shift. And we’ve found that success often comes down to three key strategies: early action, education, and empowerment all delivered through a collaborative advice model.
Start Early: Estate Transfers That Make Sense
If your superannuation balance is nudging past the $3 million mark, it might be time to think about transferring some of that wealth early. One effective approach is to provide funds to adult children, with the intention that they contribute those funds to their own super accounts. This keeps the money in a tax-effective environment, ensures some funds are preserved by the next generation and may help avoid the impact of proposed legislation like Division 296.
But early transfers don’t have to be all or nothing. Some families choose to involve their children in managing investments held in a family trust, where parents retain control, but children gain valuable experience. Others opt to gift larger sums outright, allowing children to manage the funds independently, while ensuring their children receive qualified advice to guide them with their financial decision-making.
Importantly, this strategy isn’t just for those nearing the $3 million threshold. Many wealthier individuals choose to transfer funds early to ensure that part of their legacy is directed into long-term, purpose-driven investments, rather than being spent on things which may not align with family values. For some, this means helping their children establish or grow their own super balances. For others, it’s about creating a sense of stewardship and financial responsibility. In practice, we’ve seen families fund financial advice for their heirs, giving them a strong foundation to manage their inheritance wisely. This support could empower the structures that the parents want in place, ensuring their legacy is not only passed on, but purposefully sustained.
Research shows that lifetime gifts often have a more positive impact on recipients than inheritances received after death.¹ Structured early transfers, such as contributions to children’s super or involvement in family trusts, can be powerful tools for preserving wealth and building capability.
However, while gifting funds may seem straightforward, it’s important to understand the risks. As outlined in our article ‘Gift or Loan Supporting Adult Children Financially’, gifts can expose families to third-party claims, business liabilities, and estate planning disputes if not properly documented. For substantial amounts, a formal loan agreement may offer greater protection while still supporting your children’s financial goals. Whether you choose to gift or lend, the decision should be made with professional advice to safeguard both your finances and family relationships.
We’ve seen firsthand how these strategies can preserve wealth, foster financial responsibility, and strengthen family ties. And with the potential for legislative changes on the horizon, now is a good time to consider whether an early inheritance, with the right framework is the right move for your family.
Educate and Engage: Building Financial Literacy Across Generations
Passing on wealth is one thing. Passing on the knowledge to manage it, is another.
Financial literacy is a cornerstone of successful wealth transfer. Are your children equipped to handle the responsibilities that come with inheriting significant assets? Are they involved in family discussions about money, values, and long-term goals?
We encourage families to start these conversations early. Invite your children to family meetings. Talk openly about investment decisions. Share your experiences and lessons learned. These moments of engagement can be facilitated through the early transfer strategies mentioned above, giving children a real stake in the family’s financial future.
Unplanned wealth transfers can unintentionally reinforce inequality, even within families. This underscores the importance of early education and structured involvement, ensuring that wealth is not only preserved but also used wisely and responsibly across generations.¹
For more on how to prepare your family to manage wealth across generations, see our article: Preparing Your Family to Manage Wealth in the Next Generation
It explores practical steps to engage and educate heirs and complements the strategies outlined here.
Empower with Intention: Voluntarily Invoking Powers of Attorney
Traditionally, powers of attorney are only activated when a parent experiences cognitive decline. But this can be a stressful and complicated process, often requiring medical sign-off and urgent legal intervention at a time when the family is already under emotional strain.
What if you could avoid all that by planning ahead?
We’ve worked with families where parents choose to voluntarily invoke powers of attorney while they’re still fully capable. This proactive approach allows for thoughtful conversations with lawyers, clear expectations, and a smoother transition of control. It also gives children a chance to step into their roles gradually, with guidance and support.
Importantly, the early invocation isn’t just about convenience, it’s about preserving legacy. When capacity beings to decline, it can be difficult for doctors to definitively assess whether someone has lost the ability to make decisions. Families can find themselves in a grey area: aware that there may be a decline in cognitive ability, but unable to act until the situation deteriorates further. By planning ahead, parents can ensure their wishes are respected and their children aren’t stuck in limbo.
In many cases, we’ve seen this strategy bring families closer together. Parents feel reassured, children feel empowered, and the wealth transfer becomes a collaborative journey rather than a reactive scramble.
What Successful Families Do Differently
Families that lead their wealth transition proactively tend to do a few things consistently:
- They start early, often transferring at least some of their wealth while the original wealth holder is still alive.
- They educate their heirs – not just about money, but about values, responsibility, and stewardship.
- They involve professional advisers who understand the family’s goals and the nuances of their industry.
- Estate planning must also reflect the realities of modern family structures. Blended families, single-parent households, and multi-generational living arrangements require tailored strategies to ensure equitable distribution and avoid future disputes.
This is especially important in the executive sector, where wealth is often tied to complex structures like executive share schemes, business ownership, and high-value superannuation balances. These require tailored strategies that go beyond general financial advice.
For families with complex financial structures, Family Office services offer a strategic way to manage wealth. These services integrate financial planning, legal advice, and governance frameworks like family charters, helping families navigate succession, tax, and investment decisions with clarity and confidence.
Navigating the Wealth Transfer
At Executive Strategies, we specialise in helping executives, senior managers and professionals navigate the complexities of succession, estate planning, and intergenerational wealth transfer. We don’t work in isolation. Our collaborative advice model brings together financial advisers, lawyers, accountants, and business consultants to ensure every aspect of your wealth transfer strategy is aligned.
Whether you’re considering early inheritance strategies, educating your children, or planning your legacy, we’re here to support you.
Reach out to discuss how we can help your family make the most of this historic opportunity. Contact James Marshall at +61 (0) 7 3007 2000 or email contact@executivestrategies.com.au to discuss the best approach for your family’s financial future.
Further reading:
Estate Strategies for Mixed Families: Ensuring Fairness Across All Relationships
Deciding Between Gifts and Loans: Financial Strategies for Supporting Adult Children
Executive Strategies is a solutions hub that connects executives and senior managers working in health, biotechnologies, pharmaceuticals, construction, technology and mining and resources with proven specialist advisers.
Stratus Financial Group and its advisers are Authorised Representatives of Fortnum Private Wealth ABN 54 139 889 535 AFSL 357306. This advice is general and does not take into account your objectives, financial situation, or needs. You should not act on it without first obtaining professional financial advice specific to your circumstances.
*Please note: For financial advice and services relating to this matter that are not offered under the Fortnum Private Wealth AFSL, in accordance with our collaborative advice model, when required, such matters are referred to appropriately qualified professionals.
[1] Wealth transfers and their economic effects – Research paper
